The federal budget is a “do nothing’’ budget containing deficit forecasts that can only be a guess, says fund manager John Abernethy.
“It’s really a hopeful budget and I’ve got nothing against that. Australia’s a great place to invest and as the treasurer said, our best years are ahead of us.”
He said that with the Tax Review coming up shortly, “you can’t make a forecast” on deficit numbers.
“The giveaway was when the Treasurer said there’d be no changes to superannuation.
“Everyone knows there are going to be in the Tax Review. Everyone’s saying that. So all he’s done is delay the inevitable,” Mr Abernethy said.
“We are going to get changes to the taxation regime of superannuation, the contributions and the allowable assets. Everything’s going to happen.”
He said that would produce a “dramatic change to tax collections and therefore the budget deficit.
“So projecting out to 2019 is all good stuff, but you really can’t do it.”
He criticised the lack of infrastructure investment in assets such as new airports, given predictions of one million Chinese visitors a year.
“Now, tell me that the airports of Perth, Melbourne and Sydney can cope with those numbers,” he said.
“It’ll double, then it will double again in the next five years. My point is this: The previous governments have sold off those infrastructure assets and here we’re going to run in to a jam where people are going to want to come to this place to spend money and help us grow, and they won’t be able to get into the darn place because private enterprise owns these airports and doesn’t want to spend money.”
He said that Sydney’s proposed Badgerys Creek airport was a “call option by the incumbent” that is “10 years away”.
Recorded 14 May 2015. Originally published by Andrew Main from The Australian.